SUMMARIZED CONDENSED CONSOLIDATING AND COMBINING INFORMATION

The 5.875% Senior Notes due 2021 issued by the Issuers on May 30, 2014 are jointly and severally, fully and unconditionally, guaranteed by CareTrust REIT, Inc., as the parent guarantor (the “Parent Guarantor”), and certain 100% owned subsidiaries of the Parent Guarantor other than the Issuers (collectively, the “Subsidiary Guarantors” and, together with the Parent Guarantor, the “Guarantors”), subject to automatic release under certain customary circumstances, including if the Subsidiary Guarantor is sold or sells all or substantially all of its assets, the Subsidiary Guarantor is designated “unrestricted” for covenant purposes under the indenture governing the Notes, the Subsidiary Guarantor’s guarantee of other indebtedness which resulted in the creation of the guarantee of the Notes is terminated or released, or the requirements for legal defeasance or covenant defeasance or to discharge the Indenture have been satisfied.

The following provides information regarding the entity structure of the Parent Guarantor, the Issuers and the Subsidiary Guarantors:

CareTrust REIT, Inc. – The Parent Guarantor was formed on October 29, 2013 in anticipation of the Spin-Off and the related transactions and was a wholly owned subsidiary of Ensign prior to the effective date of the Spin-Off on June 1, 2014. The Parent Guarantor did not conduct any operations or have any business prior to the date of issuance of the Notes and the consummation of the Spin-Off related transactions.

CTR Partnership, L.P. and CareTrust Capital Corp. – The Issuers, each of which is a 100% owned subsidiary of the Parent Guarantor, were formed on May 8, 2014 and May 9, 2014, respectively, in anticipation of the Spin-Off and the related transactions. The Issuers did not conduct any operations or have any business prior to the date of issuance of the Notes and the consummation of the Spin-Off related transactions.

Subsidiary Guarantors – Each of the Subsidiary Guarantors is a 100% owned subsidiary of the Parent Guarantor. Prior to the consummation of the Spin-Off, each of the Subsidiary Guarantors was a wholly owned subsidiary of Ensign. The Ensign Properties entities consist of the Subsidiary Guarantors (other than the general partner of the Operating Partnership which was formed on May 8, 2014 in anticipation of the Spin-Off and the related transactions) and the subsidiaries of the Parent Guarantor that are not Subsidiary Guarantors or Issuers (collectively, the “Non-Guarantor Subsidiaries”).

Pursuant to Rule 3-10 of Regulation S-X, the following summarized consolidating information is provided for the Parent Guarantor, the Issuers, the Subsidiary Guarantors and the Non-Guarantor Subsidiaries with respect to the Notes. This summarized financial information has been prepared from the financial statements of the Company and Ensign Properties and the books and records maintained by the Company and Ensign Properties. As described above, the Parent Guarantor and the Issuers did not conduct any operations or have any business during the periods prior to June 1, 2014.

The summarized financial information may not necessarily be indicative of the results of operations or financial position had the Parent Guarantor, the Issuers, the Subsidiary Guarantors or the Non-Guarantor Subsidiaries all been in existence or operated as independent entities during the relevant period or had the Ensign Properties entities been operated as subsidiaries of the Parent Guarantor during such period.

CONDENSED CONSOLIDATING BALANCE SHEETS

DECEMBER 31, 2016

(in thousands, except share and per share amounts)



	Parent Guarantor			Issuers		Combined Subsidiary Guarantors		Combined Non- Guarantor Subsidiaries			Elimination			Consolidated
Assets:
Real estate investments, net	$	—		$	527,639	$	328,137	$	38,142		$	—		$	893,918
Other real estate investments	—			—		13,872		—			—			13,872
Cash and cash equivalents	—			7,500		—		—			—			7,500
Accounts receivable	—			3,743		2,020		133			—			5,896
Prepaid expenses and other assets	—			1,366		3		—			—			1,369
Deferred financing costs, net	—			2,803		—		—			—			2,803
Investment in subsidiaries	463,505			401,328		—		—			(864,833		)	—
Intercompany	—			—		102,273		—			(102,273		)	—
Total assets	$	463,505		$	944,379	$	446,305	$	38,275		$	(967,106	)	$	925,358
Liabilities and Equity:
Senior unsecured notes payable, net	$	—		$	255,294	$	—	$	—		$	—		$	255,294
Senior unsecured term loan, net	—			99,422		—		—			—			99,422
Unsecured revolving credit facility	—			95,000		—		—			—			95,000
Accounts payable and accrued liabilities	—			9,713		2,291		133			—			12,137
Dividends payable	11,075			—		—		—			—			11,075
Intercompany	—			21,445		—		80,828			(102,273		)	—
Total liabilities	11,075			480,874		2,291		80,961			(102,273		)	472,928
Equity:
Common stock, $0.01 par value; 500,000,000 shares authorized, 64,816,350 shares issued and outstanding as of December 31, 2016	648			—		—		—			—			648
Additional paid-in capital	611,475			429,453		374,660		(52,899		)	(751,214		)	611,475
Cumulative distributions in excess of earnings	(159,693		)	34,052		69,354		10,213			(113,619		)	(159,693		)
Total equity	452,430			463,505		444,014		(42,686		)	(864,833		)	452,430
Total liabilities and equity	$	463,505		$	944,379	$	446,305	$	38,275		$	(967,106	)	$	925,358

CONDENSED CONSOLIDATING BALANCE SHEETS

DECEMBER 31, 2015

(in thousands, except share and per share amounts)



	Parent Guarantor			Issuers		Combined Subsidiary Guarantors		Combined Non- Guarantor Subsidiaries			Elimination			Consolidated
Assets:
Real estate investments, net	$	—		$	256,209	$	348,454	$	40,951		$	—		$	645,614
Other real estate investments	—			—		8,477		—			—			8,477
Cash and cash equivalents	—			11,467		—		—			—			11,467
Accounts receivable	—			519		1,695		128			—			2,342
Prepaid expenses and other assets	—			2,079		4		—			—			2,083
Deferred financing costs, net	—			3,183		—		—			—			3,183
Investment in subsidiaries	269,992			365,368		—		—			(635,360		)	—
Intercompany	—			—		59,160		4,186			(63,346		)	—
Total assets	$	269,992		$	638,825	$	417,790	$	45,265		$	(698,706	)	$	673,166
Liabilities and Equity:
Senior unsecured notes payable, net	$	—		$	254,229	$	—	$	—		$	—		$	254,229
Mortgage notes payable, net	—			—		—		94,676			—			94,676
Unsecured revolving credit facility	—			45,000		—		—			—			45,000
Accounts payable and accrued liabilities	—			6,258		2,433		578			—			9,269
Dividends payable	7,704			—		—		—			—			7,704
Intercompany	—			63,346		—		—			(63,346		)	—
Total liabilities	7,704			368,833		2,433		95,254			(63,346		)	410,878
Equity:
Common stock, $0.01 par value; 500,000,000 shares authorized, 47,664,742 shares issued and outstanding as of December 31, 2015	477			—		—		—			—			477
Additional paid-in capital	410,217			266,929		374,660		(52,899		)	(588,690		)	410,217
Cumulative distributions in excess of earnings	(148,406		)	3,063		40,697		2,910			(46,670		)	(148,406		)
Total equity	262,288			269,992		415,357		(49,989		)	(635,360		)	262,288
Total liabilities and equity	$	269,992		$	638,825	$	417,790	$	45,265		$	(698,706	)	$	673,166

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2016

(in thousands)



	Parent Guarantor		Issuers		Combined Subsidiary Guarantors			Combined Non- Guarantor Subsidiaries		Elimination			Consolidated
Revenues:
Rental income	$	—	$	36,855	$	45,318		$	10,953	$	—		$	93,126
Tenant reimbursements	—		2,978		4,359			509		—			7,846
Independent living facilities	—		—		2,970			—		—			2,970
Interest and other income	—		—		737			—		—			737
Total revenues	—		39,833		53,384			11,462		—			104,679
Expenses:
Depreciation and amortization	—		11,651		17,505			2,809		—			31,965
Interest expense	—		22,375		—			824		—			23,199
Property taxes	—		2,978		4,359			509		—			7,846
Acquisition costs	—		205		—			—		—			205
Independent living facilities	—		—		2,549			—		—			2,549
General and administrative	1,637		7,594		49			17		—			9,297
Total expenses	1,637		44,803		24,462			4,159		—			75,061
Loss on sale of real estate	—		—		(265		)	—		—			(265		)
Income in Subsidiary	30,990		35,960		—			—		(66,950		)	—
Net income	$	29,353	$	30,990	$	28,657		$	7,303	$	(66,950	)	$	29,353

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2015

(in thousands)



	Parent Guarantor		Issuers		Combined Subsidiary Guarantors		Combined Non- Guarantor Subsidiaries		Elimination			Consolidated
Revenues:
Rental income	$	—	$	9,979	$	45,100	$	10,900	$	—		$	65,979
Tenant reimbursements	—		655		4,375		467		—			5,497
Independent living facilities	—		—		2,510		—		—			2,510
Interest and other income	—		19		946		—		—			965
Total revenues	—		10,653		52,931		11,367		—			74,951
Expenses:
Depreciation and amortization	—		3,165		18,007		2,961		—			24,133
Interest expense	—		19,616		18		5,622		—			25,256
Property taxes	—		655		4,375		467		—			5,497
Independent living facilities	—		—		2,376		—		—			2,376
General and administrative	1,171		6,360		97		27		—			7,655
Total expenses	1,171		29,796		24,873		9,077		—			64,917
Income in Subsidiary	11,205		30,348		—		—		(41,553		)	—
Net income	$	10,034	$	11,205	$	28,058	$	2,290	$	(41,553	)	$	10,034

CONDENSED CONSOLIDATING AND COMBINING STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2014

(in thousands)



	Parent Guarantor			Issuers			Combined Subsidiary Guarantors		Combined Non- Guarantor Subsidiaries		Elimination			Consolidated
Revenues:
Rental income	$	—		$	139		$	42,337	$	8,891	$	—		$	51,367
Tenant reimbursements	—			11			4,460		485		—			4,956
Independent living facilities	—			—			2,519		—		—			2,519
Interest and other income	—			23			32		—		—			55
Total revenues	—			173			49,348		9,376		—			58,897
Expenses:
Depreciation and amortization	—			34			19,577		3,389		—			23,000
Interest expense	—			10,425			6,315		4,882		—			21,622
Loss on extinguishment of debt	—			—			4,067		—		—			4,067
Property taxes	—			11			4,460		485		—			4,956
Acquisition costs	—			—			47		—		—			47
Independent living facilities	—			—			2,243		—		—			2,243
General and administrative	—			11,105			—		—		—			11,105
Total expenses	—			21,575			36,709		8,756		—			67,040
(Loss) income in Subsidiary	(8,143		)	13,259			—		—		(5,116		)	—
Net (loss) income	(8,143		)	(8,143		)	12,639		620		(5,116		)	(8,143		)
Other comprehensive income:
Unrealized gain on interest rate swap	—			—			167		—		—			167
Reclassification adjustment on interest rate swap	—			—			1,661		—		—			1,661
Comprehensive (loss) income	$	(8,143	)	$	(8,143	)	$	14,467	$	620	$	(5,116	)	$	(6,315	)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2016

(in thousands)



	Parent Guarantor			Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Elimination			Consolidated
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	(91	)	$	9,253		$	45,261		$	10,008		$	—		$	64,431
Cash flows from investing activities:
Acquisition of real estate	—			(281,228		)	—			—			—			(281,228		)
Improvements to real estate	—			(485		)	(277		)	—			—			(762		)
Purchases of equipment, furniture, and fixtures	—			(81		)	(70		)	—			—			(151		)
Preferred equity investments	—			—			(4,656		)	—			—			(4,656		)
Escrow deposits for acquisition of real estate	—			(700		)	—			—			—			(700		)
Net proceeds from the sale of real estate	—			—			2,855			—			—			2,855
Distribution from subsidiary	37,269			—			—			—			(37,269		)	—
Intercompany financing	(199,796		)	(41,901		)	—			—			241,697			—
Net cash used in investing activities	(162,527		)	(324,395		)	(2,148		)	—			204,428			(284,642		)
Cash flows from financing activities:
Proceeds from the issuance of common stock, net	200,402			—			—			—			—			200,402
Proceeds from the issuance of senior unsecured term loan	—			100,000			—			—			—			100,000
Borrowings under unsecured revolving credit facility	—			255,000			—			—			—			255,000
Payments on unsecured revolving credit facility	—			(205,000		)	—			—			—			(205,000		)
Payments on the mortgage notes payable	—			—			—			(95,022		)	—			(95,022		)
Payments of deferred financing costs	—			(1,352		)	—			—			—			(1,352		)
Net-settle adjustment on restricted stock	(515		)	—			—			—			—			(515		)
Dividends paid on common stock	(37,269		)	—			—			—			—			(37,269		)
Distribution to Parent	—			(37,269		)	—			—			37,269			—
Intercompany financing	—			199,796			(43,113		)	85,014			(241,697		)	—
Net cash provided by (used in) financing activities	162,618			311,175			(43,113		)	(10,008		)	(204,428		)	216,244
Net decrease in cash and cash equivalents	—			(3,967		)	—			—			—			(3,967		)
Cash and cash equivalents, beginning of period	—			11,467			—			—			—			11,467
Cash and cash equivalents, end of period	$	—		$	7,500		$	—		$	—		$	—		$	7,500

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2015

(in thousands)



	Parent Guarantor			Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Elimination			Consolidated
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	(15	)	$	(9,894	)	$	44,675		$	5,488		$	—		$	40,254
Cash flows from investing activities:
Acquisition of real estate	—			(232,466		)	—			—			—			(232,466		)
Improvements to real estate	—			(19		)	(168		)	—			—			(187		)
Purchases of equipment, furniture, and fixtures	—			(195		)	(81		)	—			—			(276		)
Escrow deposits for acquisition of real estate	—			(1,750		)	—			—			—			(1,750		)
Net proceeds from the sale of real estate	—			—			30			—			—			30
Distribution from subsidiary	21,790			—			—			—			(21,790		)	—
Intercompany financing	(162,803		)	46,761			—			—			116,042			—
Net cash used in investing activities	(141,013		)	(187,669		)	(219		)	—			94,252			(234,649		)
Cash flows from financing activities:
Proceeds from the issuance of common stock, net	162,963			—			—			—			—			162,963
Borrowings under unsecured revolving credit facility	—			45,000			—			—			—			45,000
Borrowings under senior secured revolving credit facility	—			35,000			—			—			—			35,000
Repayments of borrowings under senior secured revolving credit facility	—			(35,000		)	—			—			—			(35,000		)
Payments on the mortgage notes payable	—			—			(558		)	(2,625		)	—			(3,183		)
Net-settle adjustment on restricted stock	(145		)	—			—			—			—			(145		)
Payments of deferred financing costs	—			(2,303		)	—			—			—			(2,303		)
Dividends paid on common stock	(21,790		)	—			—			—			—			(21,790		)
Distribution to Parent	—			(21,790		)	—			—			21,790			—
Intercompany financing	—			162,803			(43,898		)	(2,863		)	(116,042		)	—
Net cash provided by (used in) financing activities	141,028			183,710			(44,456		)	(5,488		)	(94,252		)	180,542
Net decrease in cash and cash equivalents	—			(13,853		)	—			—			—			(13,853		)
Cash and cash equivalents, beginning of period	—			25,320			—			—			—			25,320
Cash and cash equivalents, end of period	$	—		$	11,467		$	—		$	—		$	—		$	11,467

CONDENSED CONSOLIDATING AND COMBINING STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2014

(in thousands)



	Parent Guarantor			Issuers			Combined Subsidiary Guarantors			Combined Non-Guarantor Subsidiaries			Elimination			Consolidated
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	—		$	(21,185	)	$	38,955		$	4,136		$	—		$	21,906
Cash flows from investing activities:
Acquisition of real estate	—			(25,742		)	—			—			—			(25,742		)
Improvements to real estate	—			—			(579		)	—			—			(579		)
Purchases of equipment, furniture and fixtures	—			(95		)	(14,819		)	(4,361		)	—			(19,275		)
Preferred equity investment	—			—			(7,500		)	—			—			(7,500		)
Escrow deposit for acquisition of real estate	—			(500		)	—			—			—			(500		)
Distribution from subsidiary	33,001			—			—			—			(33,001		)	—
Intercompany financing	—			(141,231		)	—			—			141,231			—
Net cash provided by (used in) investing activities	33,001			(167,568		)	(22,898		)	(4,361		)	108,230			(53,596		)
Cash flows from financing activities:
Proceeds from the issuance of senior unsecured notes payable	—			260,000			—			—			—			260,000
Proceeds from the senior secured revolving credit facility	—			—			10,000			—			—			10,000
Proceeds from the issuance of mortgage notes payable	—			—			—			50,676			—			50,676
Payments on the senior secured revolving credit facility	—			—			(88,701		)	—			—			(88,701		)
Payments on the mortgage notes payable	—			—			(66,905		)	(1,250		)	—			(68,155		)
Payments on the senior secured term loan	—			—			(65,624		)	—			—			(65,624		)
Payments of deferred financing costs	—			(12,926		)	—			(510		)	—			(13,436		)
Net contribution from Ensign	—			—			52,385			(48,029		)	—			4,356
Dividends paid on common stock	(33,001		)	—			—			—			—			(33,001		)
Distribution to Parent	—			(33,001		)	—			—			33,001			—
Intercompany financing	—			—			141,893			(662		)	(141,231		)	—
Net cash (used in) provided by financing activities	(33,001		)	214,073			(16,952		)	225			(108,230		)	56,115
Net increase (decrease) in cash and cash equivalents	—			25,320			(895		)	—			—			24,425
Cash and cash equivalents, beginning of period	—			—			895			—			—			895
Cash and cash equivalents, end of period	$	—		$	25,320		$	—		$	—		$	—		$	25,320